LANXESS forecasts Europe auto market slump, global rise

21 March 2013 15:05[Source: ICIS news]

DUSSELDORF (ICIS)--German specialty chemicals group LANXESS expects automotive production to fall by 8.5% year on year in western Europe during 2013, with auto tyre production sinking by 7.5% over the same period, the chairman of the company’s board of management said on Thursday.

The ongoing eurozone crisis means that the auto and tyre sectors are being hit by a lack of consumer confidence, according to Axel Heitmann. LANXESS is suffering from poor demand conditions and today issued a warning that its first quarter earnings would fall significantly as a result compared to the first quarter of 2012.

Heitmann added that EU new car registrations in February dropped by 10.5% from the same month a year before, to their lowest level in 20 years. New car sales in January were weak, whilst sales of original equipment tyres in February were 13% below last year.

However, Heitmann is more bullish about the global situation. A 10% increase in Chinese auto production should lead to a hike of 2.5% in global tyre manufacture for 2013, with some forecasts expanding that figure to 5%.

Tyre production in the Asia Pacific region is expected to grow by around 7.5% per year through to 2017 with a global figure of 5% annual growth, according to LANXESS estimates.

Heitmann said: “Car manufacturers like BMW, Audi, Fiat and Chrysler – and also some tyre producers – are planning new facilities and capacity expansions in Asia and Latin America. Volkswagen alone is planning to build seven new plants in China by 2018, nearly doubling its capacity there.”